New Report: The Oil and Gas Industry is Vital to U.S. Economic Recovery
Mon, August 02, 2021
The COVID-19 pandemic created unprecedented economic instability across the United States and the world. As the United States economy recovers, a new report confirms that America’s oil and gas industry will be critical to driving post-pandemic resurgence in every sector of the U.S. economy.
In a report from PricewaterhouseCoopers, the oil and gas industry was identified as a key driver for long-term economic and job growth across the nation. The report, which was commissioned by the American Petroleum Institute, is a step to quantify the direct and indirect economic impacts of the industry in terms of employment, labor, income, and value added at the national, state, and congressional district levels.
In 2019, the oil and gas industry accounted for approximately $1.7 trillion, 7.9 percent of the GDP, in the U.S. economy.
The industry has contributed 11.3 million full-time and part-time jobs to the nation’s economy. Further, for every job directly related to the oil and gas industry, 3.5 additional jobs were supported.
American job growth will be essential to supporting the U.S. throughout the economic recovery, and the oil and gas industry will be vital in supporting jobs across every sector of the U.S. market.
In Texas, the upstream oil and gas sector added 8,766 net jobs during the first half of 2021.
The study also analyzed the labor income generated from wages, salaries, and benefits – finding the industry comprised a significant portion of the U.S. national labor income. The oil and gas industry produced more than $892.7 billion in labor income or 6.8% of the U.S. national labor income in 2019.
One 2019 analysis from the Wall Street Journal determined that the energy and utility sector has the highest median salary of any industry in the S&P 500, with the typical worker at one energy company earning nearly $200,000 annually.
The energy industry provides significant economic value beyond employment
In terms of the value added, the report categorizes “value added” as employee compensation, proprietors, income, income to capital owners from property, and indirect business taxes. It is estimated that directly or indirectly, the U.S. oil and gas industry’s operations generate $1.4 trillion of value added across the national economy and $254.4 billion in terms of capital investment added.
U.S. oil and gas is an essential resource that sustains daily operations in virtually every industry and sector across the world economy. Beyond being the most important source of energy since the mid-1950s, oil and gas has played a crucial role in supporting and facilitating growth throughout the U.S economy.
This report further emphasizes the role of the oil and gas industry moving forward. As the U.S. begins recovering from the difficult economic impacts of the COVID-19 pandemic, the oil and gas industry will continue to be a key driver of job and economic growth.